The Nippon/U.S. Steel Merger Should Have Bipartisan Support

Nippon Steel’s proposed acquisition of U.S. Steel will strengthen national security, protect U.S. Steel jobs, and boost U.S. manufacturing. There is a lot to like, though it should not be a surprise that election year politics has produced some knee jerk opposition to an iconic American company being acquired by a company headquartered overseas.

A bipartisan group of more than fifty members of the U.S. House sent a letter to President Biden raising concerns about the acquisition. They worried that the deal would endanger national security, reduce U.S. jobs, and harm U.S. manufacturing. A bipartisan group of Senators has also opposed the deal.

It is understandable that politicians would be concerned about the fate of a famous U.S. company and the workers and communities which depend on it. But a review of the facts and economics show that this deal is a win for U.S. Steel and should receive strong bipartisan support in Washington.

First, rather than threaten national security, this investment in U.S. Steel will strengthen our national security. Japan is one of our closest allies, and we have one of the strongest economic and trade relationships in the world. Japan is the largest foreign investor in America, and Japanese companies have been investing in America for years.  Nearly one million Americans are employed by Japanese companies in the U.S. and it is the number one foreign employer in the U.S. manufacturing sector.

Japan automakers have been building cars in the U.S. for decades, investing billions of dollars in America and employing thousands of American workers. None of these investments have posed a threat to national security. And the entire automobile industry favors this deal over the other potential buyer, Cleveland-Cliffs. Analysts say a U.S. Steel-Cliffs merger would raise antitrust concerns, increase auto prices, and result in job losses in both industries.

China’s dominance of the world’s steel market is the real competitive threat to the entire U.S. steel industry. China produces more than half of the world’s steel, and six of the largest ten steel companies are Chinese. Nippon Steel is the world’s fourth-largest steel producer, and the acquisition of U.S. Steel would elevate it to second place. Both companies stand to benefit from the deal. Not only would Nippon gain access to American industrial capabilities, but U.S. Steel would also achieve greater global market reach. Additionally, U.S. Steel would receive an abundance of technological advancements and investments to help it modernize and be better able to compete.

Second, Nippon Steel has pledged to protect U.S. steel jobs. The company has been operating in the U.S. for nearly forty years. With investments in eight steel companies in this country, it has a long track record of supporting U.S. workers, their unions, and their communities. The company has promised it will keep the U.S. Steel name and headquarters in Pittsburgh with its 1,000 jobs. It will not shift any production or jobs overseas. Rather than losing jobs, the deal will strengthen U.S. Steel and ultimately provide more jobs and better job security for its workers.

Finally, this investment in America will benefit US manufacturing and the U.S. economy. A stronger, modernized U.S. steel industry would better serve U.S. manufacturers that use steel products. A more efficient and productive steel industry would be able to expand production of domestic steel, benefiting U.S. manufacturers and discouraging them from moving their operations and jobs overseas.

The Nippon-U.S. Steel deal will enhance our national security, protect U.S. jobs, and benefit U.S. manufacturers. It is a good deal for America and should receive bipartisan support.